To ask how you afforded your next home

[Junosmum]

We bought our first home 6 years ago, 90% mortgage. Bought as we had good (for early 20s) salaries and house prices were pretty cheap yet you could still get mortgages. Used all of our meagre savings and a gift from parents for the deposit. Furnished with donated furniture.

All great, nice first home etc. But I can't see how we will move on from here. We've overpaid the mortgage and its gone up in value by around 20k so now own about 35% of the house. We have a bit in savings and our salaries have gone up but only by about 6k each.

Our friends are now buying their next homes- either with inheritances or help from parents again, neither of which are options for us.

How did you make the next move? Is an inheritance or lottery win necessary?

(Assuming that you want/need to move on).

[Babettescat]

Bought first home two years ago for 169k with 90% mortgage

Sold first home this month for 198k which paid off remaining 150k mortgage on it and left 40k surplus with which we put down 28k deposit on new house worth 275k and have 12k left over to do a garage conversion, laminate floor whole house and put 4K in bank

[namechangedtoday15]

Bought in 2000, house doubled in price in 4 years. Bought again (bigger house) in 2004 and added value by completely refurbishing it.

Luckily we sold at the very start of 2008 before house prices crashed and went into rented. Rented for 2+ years then bought our current house in 2010 when prices were still low (and by going back to a 25 yr mortgage). We were in great position as we weren't in a chain etc. It's a doer upper and only now 6 years on can we afford to extend it and do what we wanted initially. But it is / will be our forever home. We couldn't afford it now, it's probably increased in value by 50% in 6 years.

[WorraLiberty]

The thing with my house is, it's now worth 5 times the price I paid for it 21 years ago.

But so are the rest of the houses in the area (and it's a pretty shit area really), so until we're ready to move further out of London, we might as well stay put.

Right now the reasons to stay are, my 84 year old Dad lives a 10 minute drive away, the kids are doing really well at the local school and me and DH both work almost on our doorstep.

So we'll probably be here for a few more years to come.

[GreaseIsNotTheWord]

Bought our house in 2006 for £88k.

Now worth £110k, plus we have overpaid, so have around £60k equity. And we're earning a lot more than 10 years ago due to various promotions so can afford a bigger mortgage now.

We're moving next year and planning to put down a £50k deposit, take out a £250k mortgage and use the remaining £10k for costs/decorating/any other adjustments to the new house.

[Northernlurker]

We had a decent amount of equity plus rise in income. We were in our first house for nine years though.

[StepAwayFromTheThesaurus]

We bought a house in 2012 with a 20% deposit. It needed a lot of work, so we had extra savings for that. So the house is a lot nicer now than it was then.

DH is obsessed with overpaying and reducing the term of the mortgage. He has reduced the original term of the mortgage from 25 to 12 years in the time we've lived here. So we now have a lot of equity in the house. He's also saved up enough money to cover a move (plus a bit more for changes to the new house). We haven't even moved yet and he's annoyingly obsessed with reducing the term of the new mortgage (because he's annoyed that the new term is 20 years); he has a plan to pay it off in 10 years.

The house has also risen in value, over and above what we spent on doing it up. Not enormously but a little bit. The stamp duty changes that removed the £250k ceiling mean that people are now willing to pay sums in what was previously a bit of a black hole between £250k-280k.

So all of that combined means we can move from a semi to a much bigger detached. We've had to move area slightly to do so, as big detached (victorian and 1930s) houses here are much more expensive than we can afford. Newer detached houses 3 minutes drive away are much more affordable.

[user1463172942]

Luck really. We bought our first house in 1999 and when we sold it it was worth nearly double. But then we moved to our current house, paid a lot and house values plummeted. It's only just back to being worth what we paid for it.

If we had bought our first house a few years later we probably wouldn't have been able to move on.

Could you extend your current house? That's probably what we'll do next.

[TheNaze73]

Using equity & savings

[MrsSparkles]

Luck. We bought at the apparent top of the market at the end of 2007 (and were told by everyone how mad we were). Overpaid our mortgage like crazy (pre-kids), saved and benefited from a huge house price rise in London.

We then moved out of London taking a massive chunk of equity with us, plus some additional savings which enabled us to buy a much bigger house. Much less overpaying nowadays with children and me only working part time, but we try to.

[Jelliedeels]

Buying renovating and worse of all family inheritance

[Orda1]

Ok, I am probably being embarrassing ignorant, but surely you just use the money from your original deposit (though I know yours was only 10%) plus savings in the six years?

We put a lot down as a deposit in our first home, prices are going up so hoping we should get back a good chunk. Or am I dreaming!?

[miraclebabyplease]

People died

[chelle792]

orda I guess the thing is the jump in house prices don't necessarily mean the bank will give you a higher mortgage. I struggled when I bought this place and haven't really managed to build up any savings so don't have anything saved up for moving costs. I do have a fair amount of equity but not enough for the bank to lend on a bigger house unfortunately.

op what's your house like? Is it liveable for a while? DH is currently researching how to build extensions. He's aiming to build a single storey extension out back - he's going to do everything apart from the brick work. It'll cut the size of our garden down by a third but will be worth it for the extra space. We're also considering reconfiguring the internal downstairs walls to give a smaller living room and bigger kitchen. It'll work better for when the baby arrives, I think

[SpringerS]

We sold in London and moved to my small home city where we bought a detached house on a big plot in a great location for cash. We don't have the same earning potential but we are far, far, far better off. With no monthly housing outlay we can live luxuriously on very little compared to what we spent in London. Now I'm a SAHM and my husband works contracts that he enjoys rather than having to take every scrap of work just to make ends meet. We have no debts, 2 cars, we go on holiday a few times a year.

Sometimes earning good money in a big city is a false economy.

[MsRinky]

Bought our first house on a 95% mortgage, but overpaid for 10 years and only moved up when we'd paid it off. The 100% equity meant we only had a 45% mortgage on the next place, and we paid that off in 5 years. Not moving again until we retire.

[IronMaggie]

I've been thinking the same thing OP. Our first home was a tiny flat in London (zone 2), which we bought right at the height of the property silliness, early 2007 I think. However, because interest rates were ridiculously low at the time, our housing costs were next to nothing and our incomes went up significantly. We were therefore able to build up a big savings pot over the next three years, which paid for property no.2.

Now property no.2 isn't quite in the ideal location and needs a lot of work done to it, so we like the idea of moving, but can't see how this would happen. Although property values have gone up significantly, that also means property no.3 would also be more expensive if we were to move on.

So now we pay a fairly hefty mortgage, have considerable childcare costs, and almost flat incomes. Outside of lottery wins, we won't be moving along the property ladder for a loooong time.

[IronMaggie]

Springer I think you might be right. London is great in many ways but we also have friends come to visit who almost pity us for how hard we work for the quality of life we have. I do wonder if we'd be better off earning less elsewhere too. Unfortunately our jobs are pretty London-centric at the moment, but we haven't ruled it out...